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Digitalisation of money and the future of monetary policy

Peter Bofinger, (2018), “Digitalisation of money and the future of monetary policy”, VoxEU, 12 June

Most economists will agree that the future of money will be more digital than today. But while everybody speaks of ‘digitalisation’, the concrete meaning of this term remains very often unclear. There are four major areas where digitisation could modify the traditional forms of money and credit and as consequence modify the theory and practice of monetary policy:

  • the substitution of cash with electronic money;
  • the substitution of traditional bank deposits and bank notes with cryptocurrencies;
  • the substitution of bank deposits with central bank deposits for everyone (‘universal reserves’);
  • the substitution of bank lending with peer-to-peer lending on the basis of digital platforms.

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